This is me in front of the windfarm which I helped finance two years ago. It's up and running, and will be generating clean energy for the next 20-25 years - at a price guaranteed not to increase for the whole period. It was inaugurated yesterday and christened Princess Amalia windfarm, after the young daughter of the Dutch crown prince.

Now that French wholesale prices are becoming higher than the feed-in tariff paid to wind farms (ie it's getting cheaper to buy "subsidized" wind power than regular, "competitive" power on the free market), it's particularly sweet.

French day-ahead electricity prices on Powernext (free reg. required). The regulated tariff for wind power is 82 EUR/MWh or lower.

Of course, the costs (and the tariffs) for offshore wind are still slightly higher than for onshore, but this is likely to change quickly as the sector moves away from semi-experimental construction procedures to standardised methods, and as the current bottlenecks in the supply chain recede as more production capacity is put in place.

The fact remains: onshore wind costs 40-70 EUR/MWh and offshore wind power costs 90-120 EUR/MWh today and both will cost that, or less, in 15 years' time. Can any other electricity source say that, except for hydro (which cannot increase its production capacity) or solar (which needs a few more years of development to see its still high costs - 250-350 EUR/MWh - come down to more attractive levels)?

Wind's only obstacle today is the still widespread perception that it is not a "serious" energy source, that it's only a small part of the solution, and that it's not really reliable anyway.

It was heartening to see earlier this week this ad in all French newspapers, whereby all the big French utilities (including almost-all-nuclear EDF) publicly supported wind power and insisted they would continue to invest in the sector:

But as power generation manufacturers like GE, Siemens and others get a increasingly large share of their turnover from selling wind turbines, as Vestas (the leading wind turbine manufacturer) sees its market capitalisation reach EUR 15-20 billion, as foundries, steel makers, gearbox manufacturers, shipping companies and others see massively increasing orders coming their way from the wind industry, and as local farmers and public officials realize that they can get extra income, and extra local jobs, maybe the tide of "seriousness" will turn readily enough.

And as wind capacity installed each year continues to increase by 20% or more each year worldwide, its share of world production will quickly reach undismissable levels. This year, a number of symbolic threshholds were reached - 100GW of installed capacity, one exajoule of annual electricity generation, 40% of electricity produced from wind in Spain on some days. All of this, essentially starting from scratch less than 10 years ago. what will another 10 years bring us?

Massive unreliability, as we need to wait for wind to blow to turn on our computers or our air conditioning? Or simply new ways to run the grid, as the experience of Denmark (which has enjoyed a number of days when more than 100% of its electricity needs was produced by wind) or Spain shows? The French grid operator, RTE, long extremely wary of wind power and its unreliability, had this to say in its latest annual report (big PDF, in French, see p.49):

The second point is about wind's contribution to peak demand: despite wind's intermittency, wind farms reduce the need in thermal power plants to ensure the requisite level of supply security. One can speak of substituted capacity.

The capacity substitution rate (ratio of thermal capacity replaced to installed wind capacity) is close to the average capacity factor of wind farms in winter (around 30%) for a small proportion of wind in the system (a few GW). It goes down as that proportion increases, but remains above 20% with around 15GW of wind power.

Intermittency is a real issue, but it is one that can be dealt with at what, so far, appears to be an extremely low cost - investment in the grid, something that's useful in any case if we want resilient systems.

I wonder if everyone here really understands the powerful steps forward that JaP and his bank have made, to all our benefit. Think about it for a minute. Despite the incredible strides windpower has made in the past decades, there is still opposition, especially in britain where the resource is strongest. BUT, here we see that the industry can even install turbines with foundations under water! We can bear the extra cost because of the far more powerful, steady, and less turbulent winds offshore.

In the context of ET, the readers here should feel privileged to have the discussion of European and wider politics, as well as economic and social theory, undergirded by a man who puts his career on the line for the vision of a future seen in the photos above.

As someone who first was recognized for promoting the potential of offshore windpower in 1980 (or was it 1981?), i can only congratulate our ET Founder, and hope we can use this platform to enhance all of our visions and understandings.

Of course, J is just taking some "kudos" time from this project, knowing that next week he still has to get back to work on the next series of projects which still need to reach the same level of what he's already achieved with this baby. But i stand behind his efforts with all my experience can muster.

Pity about that first photo - is it a unicorn ? :-) Another example of how selective perception is, we focus on the person and don't notice the background. Fortunately Jerome focuses a lot of his attention on the background which is crucial to our lives.

I was afraid it was a noose for a second. Then I realized he is actually growing a windmill out of his head. Seriously, just when you think he can do no more... He's the world's first moble, self-generated, human windfarm. Amazing! An exemple for us all...

"Pretending that you already know the answer when you don't is not actually very helpful." ~Migeru.

It has been my experience that folks who understand sailing are usually MUCH more receptive to a discussion of windpower. Understand sailing and you have a basic grasp of both the problems and potential of wind generation.

"Remember the I35W bridge--who needs terrorists when there are Republicans"

Another example of how selective perception is, we focus on the person and don't notice the background.

The real background, especially in subsequent photos, shows AN ORANGE FOUNDATION above the water line. Could it be that J has funded a project used to market Dutch chances in the upcoming EuroCup?
(CH, why do you promote controversy here? You know that orange is the color of the best anti-corrosive paint used in the industry.)

LONDON (Reuters) - Europeans are facing big increases in their energy costs this year and beyond as the effect of soaring oil on wholesale power and gas prices hits customers' bills.

Crude oil prices have doubled in the last year. As a result, wholesale forward and gas power markets have also surged to record highs in the last few weeks and are showing little sign of retracing in the foreseeable future.

(...)

Only the 99 percent of French households that benefit from relatively low state-set electricity prices look like being sheltered from the wave of surging prices, largely because the French government responded to the oil shocks of the 1970s by building Europe's largest fleet on nuclear power plants.

Their electricity bills have been unchanged since August 2007 and look immune to the latest oil crisis.

"In the contract that we have with the state, we are not authorised to raise tariffs above the inflation," a spokesman for state-run power giant EDF said.

(ok, this is not directly a pro-wind message, but it's a pro-long term energy policy, anti-deregulation, and pro-carbon-poor, State-funded electricity sources)

Congrats on the achievement. On half related news, could you point me to good reads on the decoupling of oil and gas markets? I'm getting pretty curious about the effect on higher commodity prices on electricity prices... Thanks

Energy forms are not created equal. Gasoline and diesel are great fuels for transportation, and at the moment there are few viable alternatives. Coal, on the other hand, is just dandy for generating electricity and smelting metals. Natural gas is terrific for space heating, powering electricity-generating turbines and manufacturing fertilizer and petrochemicals.

Because of their different applications and their different energy densities, hydrocarbons have different relative prices. And until recently, they were priced in a band which reflected their relative values. That band is now falling apart. Perhaps this is a sign of things to come - but not before the market experiences what commodity traders call a "short squeeze".

Oil and Natural Gas are typically welded at the investment hip. They often occur simultaneously in developed fields and are lumped together in much the same way as physical gold and silver - ratios of one to the other are viewed historically and investibility in either looks attractive when those ratios are either high or low.

I'm going to offer an alternative view. Consider oil and natural gas as different bridges, of limited life-spans, to the future. Oil's bridge was built generations ago. It lifted early industrial, fuel powered societies thru an assisted muscle powered age to a decidedly unmuscled technological age. While there are still decades of diminishing supply left it is the fuel of the past. Literally, that bridge has been crossed. Natural gas will, of necessity, carry us over a shorter time span to the next energy bridges, most likely some version of much cleaner coal, nuclear power, and wind/solar power. Even those future generation sources will not be final answers, but in investing, final answers are not necessary. Only profitable ones.

Now maybe the energy experts can comment.

When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done. — John M. Keynes

So far I'm seeing that the LNG market has developed a sufficient infrastructure and capacity to transfer gas from one regional market to another. But that still doesn't meant that they are decoupled, as transport and infrastructure costs add a premium, rather that world gas prices are closely aligned.

What links oil and gas (costly infrastructure) is still present and weights in on long term contracts... So i'm pretty confused.

I don't believe oil & gas prices can be decoupled by much in the long run. A BTU is a BTU (a joule is a joule). Both fuels are perfectly substitutable for a large enough number of uses (starting with electricity generation) so that their prices cannot remain too far apart for too long - not as long as boilers can be converted from one to the other.

Short term variations will be uncorrelated, but the overall trend will remain similar.

... its a sign that people making long term financial investments in gas infrastructure are seeing a serious risk of peak gas.

That's the only way I see it happening.

Obviously the average world prices cannot be entirely decoupled, because it only requires one partial substitute that can be shifted from one region to another to couple the average prices over time. But if only one of two partial substitutes are transportable between global regions, there could be what looks like decoupling within a given region, as the regional BTU_oil/BTU_gas ratio departs from historical patterns.

In the short and medium term, decoupling between oil and gas happens in a given region because the infrastructure to permit physical arbitrage between a lower price and a higher price gas region is not in place. And that is obviously not going to lead to long-term decoupling ... given confidence in the future supply of natural gas, and given a sustained arbitrage opportunity, that infrastructure will eventually get built.

I think more likely people are seeing the effects of the price volatility that comes with the loss of a buffer production capacity ... I think its probably a direct result from queuing theory that if there is not stabilizing buffer in either market, there will not only be a dramatic increase in short term price volatility, but that within the short-term, the price swings in the two markets will not be highly correlated.

Stated (slightly) more simply, as it becomes more common for the spot price in particular regions to swing more widely around the medium term global price trend ...

... the coupling of global oil and gas medium term price trends tells us less and less about the ratio of prices in a particular pair of regional spot markets.

It is also a beautiful creation. I remember driving south from LA in the 80's and stumbling across a huge coastal wind farm draped over the hills. (Was that Crazy Horse?). The first farm I'd ever seen. We stopped for an hour just to admire them and get as close as we could. It's probably because as a boy I loved making models of piston-engine planes. So I'm probably a propellor freak.

I'm amazed by the possibility you had to actually do something to change a small part of the world (in a good way).

That's what I like in work ^_^

As for the "ugly" problem, I was wondering if the next 10-15 years would not see the development of offshore submarine power plants. the acceptability by the public would be higher I think.

There are a number of experiments that show good new technologies to get electricity from underwater tidal current. These are more reliable than wind (occasional mariner and sailman speaking) but will have to face a number of issues still, from small series technical problems, to financing and regulations obstacles (underwater cables need authorization, and sharing the sub ground with fishermen is an issue).